Kagerou is non-human, unlike most dreamers, and seems to be some sort of shadow or spirit. It's most likely he is a shadow though, being all black with white eyes and a mouth, a spike at the top of his head, and a ghostly body/tail.
Kagerou seems to be friends with Yon Goh, and acts like a sort of guide with him. Not much is know about his personality, but he is typically shown following Yon Goh, and trying to get him out of trouble.
Is is first shown in Witoru, and then later appears in Shadow, Fantasy, Shade. in his own game, he seems to have dreams similar to Yon Goh, but more traditionally Japanese-styled. Shadow, Fantasy, Shade seems to be Kagerou before he met Yon Goh, and it is possible he had problems keeping his chasers away from what seems to be a shrine.